Budget 2025: Child supports and lump sums aim to ‘lessen Ireland’s problems’
Jack Chambers said Budget 2025 presented a unique opportunity to ‘plan, transform and deliver for the future’.
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Your support makes all the difference.Several supports for parents, one-off welfare sums and tax changes have been unveiled in the Budget to alleviate problems and pursue “great opportunities”.
Finance Minister Jack Chambers said Budget 2025 has “the common good at its core” and provides a “unique” opportunity to provide better public services, more housing and significant infrastructure projects.
The Budget, worth 8.3 billion euro in tax changes and new spending measures, was accompanied by a booming cost-of-living package worth 2.2 billion euro.
The cost-of-living measures, worth just 500 million euro less than last year despite reduced inflation, come amid mounting speculation that the coalition Government may call a general election before the end of the year.
Addressing the Dail chamber, Mr Chambers said the Irish economy is in “relatively good shape”, hailing a fall in inflation and a low unemployment rate of 4.5%.
He said inflationary pressures had “eased considerably”, falling from close to 10% two years ago to below 2% since March.
But he warned that people were still “struggling” with high prices and that the state’s reliance on billions in corporation taxes from multinationals must be “kept in mind”.
The Budget includes several tax relief measures, a 12 euro increase in all welfare supports and a rise in the minimum wage.
Among the most noteworthy measures are:
– A “baby boost” payment of 420 euro for newborns– A 12 euro increase to welfare and pension payments– A 250 euro increase in the rent tax credit, bringing it to 1,000 euro– The threshold for paying the higher rate of income tax will increase by 2,000 euro to 44,000 euro– A reduction in the Universal Social Charge (USC) from 4% to 3%– The national minimum wage will increase by 80c to 13.50 euro from January 1– An increase in stamp duty on the bulk buying of homes from 10% to 15%– A reduced VAT rate of 9% for gas and electricity has been extended until April 30– The cost of a packet of cigarettes is to increase by a euro to 18.05 euro– The cost of a typical disposable vape will rise from around eight euro to 9.23 euro including VAT.
Other noteworthy measures include increased access to IVF free of charge, and the introduction of free hormone replacement therapy from January, which could save women between 360 and 840 euro a year.
The Free Schoolbooks initiative to all transition and senior cycle pupils, and the Hot School Meals programme will be extended to all primary schools, including a pilot-programme for school holidays.
The 1,000 euro reduction in the student contribution will remain and funding will also continue for the continued school-transport fee reduction and State exam fee waiver.
An exemption from income tax, capital gains tax and capital acquisitions tax on payments made to the women impacted by the failures in the CervicalCheck scandal was also announced.
Mr Chambers also suggested work would commence to investigate an income volatility scheme which farmers have long been calling for, as well as possible tax relief for people who use gyms or other fitness centres ahead of the next budget.
Another measure sees 13 million euro allocated to help integrate Ukrainians newly arrived in communities.
Mr Chambers said that people remained concerned about high prices, while Public Expenditure Minister Paschal Donohoe said that price increases of 19% between January 2021 and August this year have left many worried.
They said this was why a cost-of-living package of 2.2 billion euro was being announced.
Among the measures in that package are:
– Two 125 euro energy credit payments– Two double Child Benefit payments– A 400 euro lump sum for those in receipt of the Working Family Payment– A 300 euro lump sum for those in receipt of the Fuel Allowance– A 200 euro lump sum for those in receipt of the Living Alone Allowance.
At the outset of a budget speech to the Dail parliament, Mr Chambers said the Irish economy was in a strong position.
“The outcomes of the progress made were not inevitable,” he said. “It is a result of the drive and the focus of this government to provide a better future for everyone and in the careful management of our public finances.
“I believe Budget 2025 puts in place the policies and measures to continue this positive trajectory and to ensure that all our people see a promising and hopeful future in this country.”
Mr Chambers used the speech to signal that the Government will use 14.1 billion euro of backdated taxes due from Apple to address challenges in “housing, energy, water and transport infrastructure”.
Mr Donohoe said his officials would begin work on developing an investment framework for using the Apple funds, ensuring there was co-ordination with investments already planned through the National Development Plan.
Mr Donohoe said he and Mr Chambers had played “an essential role” in “lessening our problems” and “in pursuing the great opportunities that await”.
The minister also said he was making three billion euro from the sale of the state’s shares in the Allied Irish Banks (AIB) available for infrastructure spending.
Mr Chambers said the Government wanted to give hope to young people that they will be able to afford their own home in Ireland.
“Budget 2025 puts the country on a firm putting for the future,” he said.
“Progressivity, fairness and catalysing real opportunity for the future have been at the core of this Government’s budgets and these principles have been central to how Budget 2025 was being designed.”
Ahead of the budget, the leaders of Ireland’s coalition Government insisted the measures will not further fuel inflation.
Taoiseach and Fine Gael leader Simon Harris said the Government had taken a “balanced approach” as he dismissed claims that he was trying to buy votes ahead of an election.
Mr Harris said: “I make no apology, none whatsoever, for giving people a little bit of their own money back between now and Christmas, because that’s the buffer we need to provide people to allow the timeline between inflation falling and bills falling.”
Pressed on whether the giveaways in the Budget risked overheating the economy, Fianna Fail leader and deputy premier Micheal Martin said: “I don’t think the Budget in itself would be a significant fueller of inflation.
“We have to keep all of those issues under review, obviously, over the next 12 months – but the economy right now is in a healthy space.”
Green Party leader and Children’s Minister Roderic O’Gorman told reporters on Tuesday that the Budget meets “requirements in terms of supporting parents, children and families and supporting the planet”.